Is the Federal Reserve a false necessity, created to redistribute wealth from bottom to top?

The United States no longer uses the gold standard as backing for it's monetary system. Instead our money is created by fiat, that is, the Federal Reserve simply says it exists. The Federal Reserve, which is not a government entity loans us the money and we pay it back with interest. As a middle man isn't it in the Federal Reserve's interest to loan us as much money as it can? Given the obvious incestuous relationships between money and power in Washington, is it equally beneficial for Washington to concoct reasons for the government to need money?

I don't really have a problem with fiat money since anything will assume whatever value we place on it, but why are we paying a middle man to fabricate it from thin air? Why are we borrowing money from someone else when we could borrow the money from ourselves, much as borrowing from a 401k. We borrow from ourselves and pay ourselves back, with the same interest. That interest would then become income, rather than expense. Given that fiat money is imaginary, isn't then the debt imaginary too?

Feb 19 2013:
my advice: follow the money. when the government decides to "spin up" the economy with some extra money, the theory talks about the total (aggregate) demand. but we might want to have a look where exactly the new money enters the economy, and who is benefited. it is a very worthy topic to explore and dwell on.

Feb 19 2013:
The reading I've done on the subject lead me to believe there are ulterior motives behind the current central banking system. My interests lie not so much in proving a conspiracy exists, but in removing the device that allows that suspicion. Suspicion can only result when information is unknown. It can be unknown because of a general lack of knowledge, ie poor research, or when information is withheld, as in secrecy. Right now the general population is victimized by its own unwillingness to research important matters, and is further compounded when that research is confronted with the roadblock of secrecy. That secrecy can manifest itself in many ways, and is sometimes not recognized as secrecy.

Secrecy is easily identified when we are told we simply can not have the requested information. Not so easily recognized when the information is skewed, spun, or represented with an outright lie. It gets even more confusing when skewed or misleading information is challenged by an opposing yet equally skewed answer.

This what I think is happening right now within our political system as a whole, and because of our general unwillingness to do due diligence, or hold our employees truly accountable by requiring their transparency we will suffer under a blanket of secrecy. Fortunately there are things we can do that require no legislation or even the permission of those who would for their own benefit keep it the same.

Feb 19 2013:
What you and I know is plenty enough. Sadly most don't know, and have no real reason to care. The flip side to my own argument is that things must not be as bad as I say. If it were, more people would take an interest. In the US at least most people are not cold or hungry, two very motivational situations. The poor have a reasonably good safety net. The middle class are busy being middle class, and the rich, well, some of the rich are driving this; it's working perfectly for them. Not much impetus for change.

I try really hard to look at as many aspects of an argument as I can. Either I don't have that strong an argument, or it is simply being consumed by the shrapnel from the other side.

Feb 19 2013:
Yes, it is. Read Ed Griffin's book "The Creature From Jekyll Island."
There is a timely news story today about Germany requesting their gold boullion bars from the Federal Reserve and being told "NO". It will be interesting to see what happens there. Is the gold there? It belongs there in the vault. Why won't the FR pay to bearer on demand? Let's watch!

Feb 19 2013:
I have a book called "Secrets Of The Federal Reserve" by Eustace Mullins. It made my skin crawl. This is the kind of thing that inspires conspiracy theories. I'm not an economist, but I know for sure that when things are done in secret there is no chance that any of us can make intelligent decisions (or have intelligent conversations) without accurate information, or using information that may be completely false. Secrecy is the killer of any meaningful conversation. If this system has no ill intent there should be no reason for secrecy. There is only one reason for our employees (The Federal Reserve are not even our employees) to meet in secret. They don't want us to know what's being said.

Feb 19 2013:
Thanks for the book reference. William Greider has a book called "Secrets of the Temple". It illustrates how the FR runs the country, and you're right, it is done in secret. Mainstream, especially liberal, media ignores the subject entirely except for an occassional "another conspiracy theory" bit. People don't care to know about this sort of thing. Ignorance and apathy reigns.

Feb 19 2013:
I wasn't referring to the government borrowing money from itself, but being the lender, just as the Federal Reserve is now. Probably didn't state it clearly enough. At any rate, if we as borrowers borrow from the government we are in effect, borrowing from ourselves, and paying ourselves the interest, eliminating the middle man. I'm not understanding what causes a crash if you switch who is getting paid the interest on that debt. The only people who are out anything are the people who made the imaginary loan, and the interest received could then be used to service the debt instead of the consortium who's pocketing the money .

Eliminating (or, more practically, reducing) secrecy is the only soulution. Secrecy is the tool that allows corruption. I have some ideas about how to do that.

Feb 19 2013:
I was being generous. Your right, and sadly, not only are most Americans unaware of it, but most of our elected officials (employees) are ignorant of it as well. That's how complete the scheme is.

Feb 19 2013:
The most prosperous times in our (USA) history are when government itself printed fiat money. It did not "borrow" the money from itself. It used its constitutional authority to print it. But I fear, that because of the disparity of wealth, and the globally-based economy, combined with inadequately educated Americans and openly corrupted elected representatives who are elected year-after-year, this option is no longer available to us.

When congress gives itself the right to employ insider trading (make investments based on legislation that is expected to come to the floor and pass - before anyone else knows about it other than the businesses it expects to help), extortion (withholding legislation unless campaign donations are made), embezzlement (through ear marks that serve personal interests), bribery (allowing lobbyists to write legislation in exchange for campaign donations), and similar PROVEN corruptions, we can fix the "value of money" problem, but not the problem itself.

Add to that the disparity of wealth problem that has already destroyed our ability to keep our US economy intact (thanks to the corruptions already mentioned). The collapse appears inevitable.

Yes, money is imaginary. So is the interest on the debt - that is never printed - always owed, so that by now, there is no paying back the debt - ever. The scheme was a good one for those who designed it - made possible through a SOTUS coup d'etat as initiated by the Federalists in 1819.

The cure is not one that Americans want to think about. They would rather face the horrible consequences rather than work in advance to design a controlled crash. You can thank our educational system for a lot of that problem.